Promoting policies for the Internet economy: Discussion of the most recent OECD Recommendations

9 November 2012 - A Open Forum on Internet Governance Principles in Baku, Azerbaijan

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SEVENTH ANNUAL GOVERNANCE FORUM

BAKU, AZERBAIJAN

PROMOTING POLICIES FOR THE INTERNET ECONOMY: 

DISCUSSION OF THE MOST RECENT OECD RECOMMENDATIONS

(OPEN FORUM)

9 NOVEMBER 2012

11:00 CET

 

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This is being provided in a rough?draft format. Communication Access Realtime Translation (CART) is provided in Order to facilitate communication accessibility and may not be a totally verbatim record of the proceedings.

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>> TAYLOR REYNOLDS:  I am Taylor Reynolds.  I will be moderating the session.  I thank you for coming.  I know it wasn't easy.  We weren't supposed to be running parallel with the final IGF session.  We thank you for coming and stepping away from the final session to talk about some key documents from the OECD to help with Internet policy?making.     

First I would like to start by giving some background on the OECD's recommendations, then I would like to it devote roughly 20?25 minutes to each of the recommendations.  If I can start with the first slide, I introduce the panelists. 

When they take the floor, I will ask each panelist if they can introduce themselves and give a brief explanation of maybe one or two sentences about where you work or where you participate.  Same with any participant who with would like to speak. 

We have Nigel Hickson from ICANN, Toru Nakaya with the Japanese Ministry of Internal Affairs and Communications, Rohan Samarajiva with LIRNE Asia, and Valerie Betancourt from GRULAC and Microsoft.  I think we will have an interesting discussion.

I would like to keep it relatively informal because number of people here.  I think we can have some interesting discussions about what these principles and recommendations mean and how they can feed into overall policy minute making.

The first thing I probably need to explain, what a recommendation is.  But even before that, what is the OECD.  It is a group of 34 member countries based in Paris.  We do economic policy making, essentially.  A recommendation, we are talking about three recommendations, our highest instrument in the OECD.

We have three that fit very well with the IGT.  So what is a recommendation coming out of the OECD?  First of all, a recommendation is a document and a set of principles that comes out of a multi?stakeholder process at the OECD.

We meet together with member countries, the Internet technical community, the business community and with civil society, working on policy issues that eventually bubble up to become a draft recommendation and then a full?fledged recommendation at the OECD.

A recommendation is not legally binding.  We call this "soft law" because it is a recommendation, not a law, but it does carry weight  within the OECD system because any council recommendation needs to be unanimously agreed upon by the OECD Council which is made up of 34 ambassadors from OECD member countries, plus an ambassador from the European Union.

These are extremely important documents for us.  They reflect a lot of work that has been done in a multi?stakeholder way.  The three recommendations I would like to speak about today are first principles for Internet policy making which came out in December 2011.

I think this is the core piece of work that has been discussed here at the IGT over the essentially two different years.  Then we will talk about protection of children online, finally recommendation for international mobile roaming services also published in 2012.

To begin I would like to talk about the Internet policy principles.  There are 14 key principles that are part of the Internet policy principles.  This was a piece of work that I think took roughly two years to put together in the OECD from a ministerial meeting in Seoul in 2008.

I won't read through them all, but I will pick a couple Internet policy principles out of the 14, and just give you a feeling for what is in these principles.  For example, one of the key principles is that we want to promote and protect the free flow of information.  We talk about the importance of an open and distributed Internet.

We talk about the fundamental importance of multi?stakeholderism and voluntarily developing codes of conduct.  We think Internet policy needs to be fair, transparent with accountability.

We think security and policy should be at the forefront.  Again we talk about individual empowerment, creativity and innovation, and that we think we should limit Internet intermediary liability.

Finally, encourage the cooperation to promote Internet security.  And we think priority needs to be given to enforcement efforts:  This is a brief list of the some of the Internet policies from the OECD.  They have been discussed here.

I would like to open the floor to some panelists who have actually fed work into the process to create the EOCD policy principles, potentially putting them into practice and can give feedback on what these are about.  Is there a panelist who would like to take the floor first?  Nigel, would you mind?

>> NIGEL HICKSON:  Good morning.  This microphone system is very odd.  It isn't that I like hearing my own voice, but you have no confidence that other people can hear you.

Anyway, I will just keep on.  I am Nigel Hickson.  I work for ICANN, and you know what ICANN is.  I won't explain it too much.

I work in Bruise else, the vice president for the Middle East and Europe.  I was with the UK government for a long time.  I have a great respect affinity for the OECD.

I think the OECD have done incredible work in this area of Internet policy principles.  I think that is an example of the work that the OECD has done, with a lot of good work done on a number of fronts.

I think there are two important aspects.  First the important aspect that the OECD has done this work, and then the principles themselves.

If we can do on the first aspect first, because for ICANN, the importance is not that these principles have just come out of the OECD; it is what happens to these principles.

Because although only 34 countries are in the OECD and have signed up to these principles, we truly believe these principles should be global in nature.  If you read the whole recommendation, in addition to including the Internet policy principles, it also gives a responsibility on member states to disseminate them throughout their own communities.

So as governments, like when I was with the UK, we shouldn't just be signing up to these principles and saying yes, they are good; we should be disseminating them in our community.

What's more, we should be taking them to other fora and saying look, these are principles we believe in.  We should be passionate about these principles.

And in being passionate about these principles, the fundamental thing I want to say in terms of what we should do with these principles, we should put them on the table in Dubai and say these are the principles we believe in, this is what's really important, these are the principles we think should govern our behavior, attitude and whole ethos in terms of the Internet.

I don't get passionate about this, but I think it is important because I think the discussion in Dubai is crying out for something positive.  The Secretary General was open in saying he wants open discussion, to promote invest broadband penetration and these principles help with investment and economic growth.

The OECD wouldn't have approved them and done all the work Taylor and colleagues have done if they didn't.

It is the opportunity to take the Internet into every home, to every citizen.  So I think we have to take them seriously and work on them.  If you look at the individual principles, I think they all have a relevance for what we're discussing it Dubai.

I'm not saying they need to be copied exactly and of course you would want to look at each one to see its relevance.

But if these principles are truly going to make the difference they should make in the 34 member states that signed up and wanted them to make, we have to take them global.

I will stop there.  Thank you for this opportunity.

>> MODERATOR:  Passing it to Rohan.

>> ROHAN SAMARJIVA:  I do not come from inside the OECD.  I run a think?tank working on emerging issues.  When we look at the proposals, and I will be very specific, the Arab states proposal which is formulated and has been officially published, I see there are contradictions with several of these principles.

But in particular I would like to focus on the fourth principle because I have spoken earlier at the IGF on the contradictions between the sending party network kinds of ideas.  I want to assure you, that language and ideas are embodied in proposals coming out of the African and Arab states.

So it isn't limited, but four promoting and enabling cross?border delivery of services, potentially in conflict with the great progress that has been made in getting certain kinds of disciplines in place with regard to trade and services.

For example, the Arab states are proposing each member state should have the right to authorize entities located outside the national territory which are providing services within.

This is where all the ICT services comes in.  Basically they should be licensing Google or Yahoo or whoever.  That is one implication of the definitions that have been proposed.

Another one, of course, the whole idea that when these charges are levied, "access charges" as they are called, you can have a situation where more than one trade where the buyer and seller are in different locations, where telecommunications or the entire Internet platform is absolutely critical, is affect.

And furthermore, that the moratorium that has been placed on regulating, interfering with e?commerce globally could also be affected.  I will stop at that point.

>> TAYLOR REYNOLDS:  Do we have any other questions or comments?

>> TORU NAKAYA:  I am Toru Nakaya from the Japanese government, head of the research institute of MIC.

I worked for the ministry itself, in charge of the coordination on ICT after this September.  I was in charge of ITU and UN and IGF.  Let me make comments on each intervention.

I fully support what those previous speakers said, in particular, the contradiction of the Arab group.  Let's say we have to introduce WCIT.  I believe WCIT is not appropriate fora to discuss Internet policy.  I stress this is a conference for reviewing treaty on telecommunications, not to discuss Internet policy or Internet issues that will lead to adopting a resolution which is not legally binding.

If WCIT stipulates something on telecommunications, it is closed to governments and members.  It is not possible to open that discussion to stakeholders because the procedure was already set out in the scope of WCIT.  I have a strange feeling many stakeholders will go WCIT to discuss Internet.

Why should they it do that?  Even though we go there, there is no opportunity to incorporate their voice into the real discussion.  Maybe they can have some silent meetings or a lobby to delegate; that's possible.

But if they make big voice, we have to expect more repercussions from those member states who opt for government regulation.  I still have a bit of concern.  If we have a big voice at WCIT on Internet, we get more and more repercussion from those countries about government regulation.

We should say WCIT is not appropriate fora to discuss Internet policy.  So let's neglect and ask governments to concentrate on telecommunications discussion so we can have another fora to clearly discuss Internet policy.

And maybe we can have it in WTPF next year, or in the follow?up process of WSIS.  Rather than supporting this idea on bringing the principles into WCIT, I suggest we bring these principles into United Nations, in particular, the second community discussion currently going on in New York. 

They are the ones who make the decision for the process.  They are the ones how the corporations should be discussed in the framework we are in, and they are taking the decision by the end of this year with WCIT.

In my view, the second one is more important than WCIT.  WCIT will do something about Internet, but it is difficult.  Looking at current ITR, there are many reservations.

Even though they are adopted, and even though it is said ITR is legally binding, if you look at those stipulations or let's say the wording, they are written in a way that can be blatantly applied, and each provision queries where possible or technically feasible.  That means member states do not have to follow if it is not technically impossible, or if it is technically impossible from it their point of view.

And if U.S. government put reservations on the ITR, that is nothing.  So for the time being, USA or USA delegation has a big power on division of ITR.  Even majority of the states opt for regulating Internet on ITR if USA delegation put a statements saying we reserve the right not to follow these provisions, then that's over.

So I think we shouldn't exaggerate the existence of WCIT anymore; rather, we should put more stress and look at the second committee of the United Nations.  That is my point.  Thank you.

>> TAYLOR REYNOLDS:  Thank you very much.  We had some very good, strong interventions there.  I would like to take the time and open this up, because I think this is a very rich vein of discussion.  I would like to open this up for comments from other participants in the room, if you have ideas or things to share.

I will open to up to the floor.  Is there anyone who would like to comment?  If not, in the meantime if I can quickly bring something up.  I was in the panel in the final session here just before coming to this meeting.  Somebody stood up and said it is great that groups like the EOCD and Council of Europe are putting these things together, but they are a small group of stakeholders, maybe this needs to go to a larger audience.

I would argue that the process we've gone through has opened this up in a multi?stakeholder way to civil society.  We actually had nonEOCD countries signing on to the Internet principles, like Costa Rica and Egypt.  Other countries are welcome to join.

I think OECD added value in bringing people together and coming up with a very well thought outset of policy principles to offer to the world as one large group.  So I would be interested in hearing how you think these types of principles that are created this way can actually be disseminated to groups that are beyond the borders of, for example, the traditional 34 OECD countries.

Anyone have any thoughts on that?

>> VALERIE BETANCOURT:  I can't hear myself, but I presume everyone can hear me.  I have the same problem.  I am Valerie Betancourt.  I work for Microsoft based out of Singapore, covering Asia Pacific region looking at Internet and some telecom policy issues.

Before joining Microsoft this year, I worked for Skype, and following the acquisition earlier this year I am now part of the wider Microsoft family, Fantastic.  Before Skype I spent ten years in the telecom sector. 

I have a couple observations of the OECD Internet policy principles.  Firstly, I think more than principles, they are actually best practice principles.

Because if you look at the countries that have participated, and also private sector that has been involved in the formulation of these principles, they actually enshrine what successful information society economies have actually done locally.

So these principles are really best practice principles that can be disseminated even beyond the EOCD economies, especially through the process of regional groupings.  I think this is a very important year for Internet policy also because it leads with the WCIT discussions.

I would like to draw on my colleague from the Japanese government, his point that WCIT may not be the most appropriate place to discuss the issues of Internet, which boils down to the very fact that the Internet is a really open architecture, and its openness is what has created a lot of the innovation and enterprise from having the Internet being an open architecture.

The fact that WCIT will happen is actually not something we can say that Internet or telecoms are two distinct and different industries or sectors at this point in time because of the phenomenon of convergence.  The fact that the OECD has taken this opportunity to put through these set of principles through a largely multi?stakeholder process is something that we would like to really commend the OECD for its great efforts.

And if OECD economies could, through their participation and regional groupings ?? for example, in Asia there are various regional groupings like the Asian Council and the APEC that would be a channel to facilitate and disseminate these best practice principles.

>> TAYLOR REYNOLDS:  Thank you, Valerie, for that input. 

Any other comments?

>> MR. SAMARAIVA:  Thank you, Mr. Reynolds.  I have two observations.  First, I don't think the WCIT is an IGF?type or WSIS?type conference.  The conference will be carried out in a way stipulated in the rules of procedure. 

Their task is to negotiate text of treaty, and not exchange ideas about Internet or telecommunications.  If the WCIT directly got into discussion to spend time on freely discussing ideas, I truly believe it will be in a failure because WCIT only has ten days total, about eight days to work on the text, three days for translation and correcting grammatical errors.

As she pointed out, it is a bit difficult to distinguish between telecommunication and ITC.  On the other hand, WCIT is based on constitution and convention which does not carry any word of IT or ITCO Internet.  So if we try to limit the scope, it is possible.  And if we open up the debate to Internet, it will probably invite anybody to jump on the discussion on Internet.

Rather, I believe it is better to have governments focus on telecommunication discussions on WCIT.  Of course, many governments want to have discussions on Internet policy, but we need to take an approach that WCIT should focus on telecommunication discussions.

My second comment is with regard to OECD and the branding.  I support that OECD did a tremendous job and work, and the result was wonderful.  However, if we mention the brand of OECD, we always receive some criticism from developing countries, regardless of the content or the result of the discussion.

So rather than putting the brand forth, maybe we should just introduce the content, the principles itself and is ask them to incorporate if they like it, not highlighting it is from OECD, we may persuade other countries to join these ideas.

>> TAYLOR REYNOLDS:  I fully agree.  Pass it to Nigel.

>> NIGEL HICKSON:  I know we have other recommendations to look at, but in my opening remarks I really didn't want to focus too much on the WCIT.  Clearly, I completely agree with what my other panelists have said; the ITRs are for telecommunications.

If the discussion is on telecommunications, it is clearly appropriate not to introduce these principles.  I think my point was that wherever the Internet is discussed, and I think we have to be pragmatic here that the Internet will be discussed in various fora because, like the WCIT, you can't stop the Internet from being discussed.

Whether or not it should appear in the ITRs, that is a different question.  But I think I am trying to say that because these principles are so important, as ambassadors for these principles, if you like, having signed up to them, we should be very aware of them when we are in discussions of the Internet and other fora.

I thoroughly agree that the second committee in the United Nations and now there is a draft ICT resolution that we saw overnight.  Some countries are calling, if you like, for a new structure or way of discussing Internet governance.

It is in those sorts of discussions that these principles play a very significant role, and we should be telling our administrations if we're concerned about this, to ensure that in discussing the draft ITC resolution in the united Nations they take regard to the principles.

Not pause they are OECD principals, but because they are all principles we all abide by and think are important for freedom, economic growth and innovation.

   Valerie?

>> VALERIE BETANCOURT:  A couple thoughts on the various proposals to attend the ITRs.  It is a very lengthy document, and various chance to the proposals are never-ending.

If we think of the proposals that are extremely detrimental to the Internet economy and information society, we can probably distill it down to a couple of baskets or categories.

One, I think it is extremely dangerous, the ITRs are expended to include in language or interpretation the scope of ICTs which can involve the processing of information.

Secondly, given that a lot of the standards are developed in the Internet economy are really voluntary and based on the bottom?up approach, any attempt to mandate technical standards within the ITRs are really detrimental.

Lastly, attempts to regulate the international settlement rates for the exchange of Internet traffic, and there are also a estimates to include other issues which may be subject to national sovereignty in the ITRs.  They are really not good ideas or concepts.

So I just wanted to draw on some specifics in looking at the various baskets or categories of amendments that are being proposed to the discussion at WCIT.

>> TAYLOR REYNOLDS:  Thank you very much.  My colleague, Sam Paltrige, pointed out that the OECD Internet principles were taken to APEC, and I think APEC endorsed the principles, broadening the consensus on these.

So there is an effort for us to take these out as something that has been created by this large group surrounding the OECD's ecosystem, put it out and have other organizations take this on board as input.  I appreciate the discussions.

If there are not any more comments, and I don't see any hands, we will move onto the second recommendation.  This is on protecting children online.  The recommendation is extremely important for us at the OECD.  It is broken down to three separate groupings of actions that governments should take.

First it sets out a list of ways we can protect children that involve all stakeholders.  These include the heading of empowerment where we create a safer environment online for children.  That is a responsibility for everyone.

The recommendation also talks about the importance of education and how it is the role of the parents to actually protect children, but that we provide the act, and stakeholders need to support parents in this work.

Also we talk about proportionality and fundamental values, setting the boundaries of children protection policies, also protecting on fundamental values of freedom of expression.  There can be a tradeoff here and we need to keep a balance of these issues.

Also, flexibility in terms of age appropriateness and technical neutrality.  It isn't just all stakeholders, but there are certain things governments can do domestically, including taking leadership on this topic, bringing it up in domestic debates.  This isn't something the government can do by itself.

There needs to be coherent coordination among all stakeholders.  It needs to be consistent and it needs to be coherent of the governments can play a key role in raising awareness, helping people know about the available tools and what can be done.

Also when they do take policy decisions, make sure the policy decisions are take then a way based on sound policy and data.  One of the key issues that also came out in this recommendation, the importance of having technologies that respect the freedom of others.  You can have tools that protect children, but at the same time you need to have tools that let adults choose certain things for themselves.  Parental controls need it to be available.

Finally, there are certain things that need to be done at an international level that cannot be dealt with just domestically, including leveraging existing good practices.  So different governments need to get together and say here is what we are doing, we found this works and might be of interest to other countries in the region or around the world.

We need to share information and evidence about what is going on.  We also need to do capacity building because this is something difficult for governments to get their hands around and actually work on.  So we need to share and make sure that the capacity is there to do that across all countries of the world.  Then we need to have coordination.  There needs to be a dialogue and coordination across different fora.

Those are the three key items, categories that come out of the recommendation on protecting children online.  I would actually like to begin by ask Mr. Nakaya if you can give us some perspective from Japan and your views on the recommendation.

>> TORU NAKAYA:  Thank you very much, Mr. Reynolds.  In fact, Japan says it is very important to establish a sound environment to establish sound and safe use for the Internet.

In light of this, Japan's government enacted protection we use in 2008.  In the same year, Japan put fort propose am regarding youth online.  We are happy to see OECD adopted the recommendation this February.  This highlighted the importance of freedom of expression, the role of parents and stakeholder partnerships, also underlying a need to create a global index. 

In evidence to the resolution, my predecessor started a research project to review the literacy of high school students in Japan.  A report was released entitled "Internet Literacy Indicator for Students," from this September.  Key findings were introduced last month, and we will keep informing on Japanese measures.

Let me introduce some key findings here.  It is based on a questionnaire, and conducted at ten schools in Japan.  More than 2,500 students participate in this test.  After summarizing the result of the questionnaire, we found that students literally legalizing the risk, however there is a gap.

And in particular, they are not so much aware of the risk regarding security and privacy issues; their recognition is relatively low.  So we found a need to educate more so students can learn how Internet has a possibility to affect their personal security and how Internet could influence their privacy.

Stakeholders such as parent/teacher associations and Internet service providers, and we are conducting a campaign with the support of these stakeholders at many schools in Japan.

We formed kind of a caravan consisting of school professors and some policymakers and sometimes Internet providers so that paints and students get together and understand how Internet affects their life.

It is really successful, but still we have to make more effort to make them understand more, because to my surprise there are many students, high school students, who already own their own smart phone.  Approximately half of the high school students have their own mobile phone ?? let's say more than half of students, and half of the students with a mobile phone have a smartphone. 

We have to inform them how smartphones are different from the mobile phone.  In fact, in Japan the Internet can be used freely and smoothly over the mobile phone, so it is difficult to realize how the smartphones are different from mobile phone Internet. 

From one point of view, it can be the responsibility of the stakeholders, including the government, to inform how it is different and how it affects personal information or data stored in the smartphones, and we are making effort to make progress on it. 

Thank you.

>> TAYLOR REYNOLDS:  Thank you very much.  Are there other members of the panel who would be interested in commenting?  In the meantime, I think I will jump in and say that I am originally from the United States and I follow the news from the United States while living abroad.

And what seems to have garnered a lot of attention recently in the United States is cyberbullying and how teens use the Internet and in particular, their mobile phone.

What is surprising to me, as someone who does research in this field, the youth are often thought of as the most technologically savvy group we have.

My own parents ask the youngest child in the family, can you come help fix the computer, can you do this, you know how to use the mobile phone.  There is almost an assumption that the teenagers "get it" and understand. 

But what seems to be lacking is this maturity about the repercussions of some of the thing that happen online, and you see that with some of the ways they use their mobile phones or the things they post on the Internet, Facebook, social networking, that there needs to be a real education here.

And I can't speak for governments, but I think governments ?? the education system might think kids don't need this kind of training because they are already tech?savvy, know how to use the computer and can do word processing, but it needs to be understood that children understand the repercussions of what they do online, and have the tools to control some of that.

Are there any other ?? I can open this up to the floor for any other comments.

>> To a certain extent there are certain things that can happen in cyberspace that would warrant the protection of children or minors.  Internet companies, in the developing economies and a number in the Asia Pacific region, they often face a situation where child pornography or child cyberpornography takes place quite often, simply because of the economies of trade.

And in these countries where families are generally poor, Internet companies have often come under some measure of criticism because in developing technologies, intermediate platforms and social networks, in a way it facilitates these things from happening on the Internet.

Microsoft has gone a step further, in addition to reaching out to these communities, for example through schools and law enforcement, government and NGOs, to also use and develop technology that would help assist law enforcement and NGOs to prevent such crimes from being perpetrated on the Internet.

For example, we do have a technology called photo DNA technology which is offered to law enforcement and NGOs to help them track images of these crimes, and to remove them.  So in a way, while technology does make it more important for us to reach out and educate the community on some of the ills that can happen, technology can also be used to help remove and eradicate some of these crime from happening on the web.

>> TAYLOR REYNOLDS:  Thank you very much.  Are there any remote participants that may want to chime in, or anyone here that would be interested in making a comment?

>> AUDIENCE MEMBER:  I am from the charter institute for IT.  In the UK we have had successful partnerships between schools and parents and police to help people understand the problems of cyberbullying, in the process of educating young people and their parents about how to deal with things like cyber?bullying and more serious things like child exploitation online.  I would think that is a good practice to use in other areas.

>> TAYLOR REYNOLDS:  Any other comments before we close this discussion on this recommendation?  Thank you very much.  This has been fruitful, and I have taken good notes from the interventions.  This has been great.

We will move to the third recommendation on international mobile roaming services.  We have Sam Paltrigde with us working on telecommunications and infrastructure at the EOCD.  He will introduce the recommendation introduced on mobile roaming services this year.

>> SAM PALTRIDE:  Thank you, Taylor.  I guess most people who have come to this meeting are aware of the various issues around international mobile roaming.  I don't know how many of switch off your data roaming when you landed at the airport or on the way here, particularly if you were paying for that yourself.

I got a text message from my operator when I landed that said calls back to France would cost me nearly three Euros per minute.  Whereas I am pleased with my operator in France and generally think they give me a great service, I am not entirely happy with prices like that when I go internationally.

Particularly these days if you own a smartphone, most people realize that the applications you have on that smartphone are probably most useful when you are traveling internationally.  With applications like maps that sometimes use quite a bit of data, basically if you are paying extraordinary amounts for that service, it doesn't really make it very useful.

OECD countries have been observing trends it in international mobile roaming for quite a few years.  Basically I think there was growing concern that the market wasn't working effectively.  We just weren't seeing the normal market disciplines applied in this area that we see in, for the most part, very competitive domestic markets.

Before I introduce the Council recommendation, I thought I would put up two slides which highlight this.  I apologize a little because these slides weren't developed for this presentation; they are simply to show you some differences in pricing for international mobile services around the world.

I am sorry, Nigel, I picked on the UK.  But I really could have put up any OECD country, and you wouldn't have different results.  But if you look at the prices shown in yellow there, they are for China Mobile. 

For these users coming to the UK and either making a local call in the UK or calling home or sending a text message, and I have put the corresponding prices ?? I picked TMobile and Orange, both UK operators.  For their customers going to to China and making the same calls in the reverse direction or a local call, there are the differences in the prices. 

OECD countries face a number of challenges, particularly due to the global financial crisis.  They are very concerned about the competitiveness of the services that are on offer for business and consumers.  We look at comparisons like this and we say well, this is not what we are used to in OECD countries.  We want competitive outcomes from the market, and we don't think we're getting them.

Can I go to the next slide?  This tells a similar story, but so many people at the IGF or other ITC meetings put up slides where she show that developing countries are far behind OECD countries.  Pick whatever metric you like, I don't care, the developed countries are generally ahead, and way ahead.

I thought I would highlight international roaming where in fact developing countries are far ahead.  And in some regions, they are far more competitive than OECD countries.

In African countries where they have had cross?border roaming, here the example is from Ghana to Nigeria.  Whether you are a prepaid or postpaid user is included in your basic tariff, so if you go to the neighboring country, there is no difference in the pricing; you pay the same price if you make a call while roaming in Nigeria as what you would pay in Ghana.

Even more interesting, if you make a third?country call to the United States, so if you went from Ghana to Nigeria and then call the United States, it is also extremely inexpensive.

And you can see the prices there for ?? what I have done here, compare the prices for an Orange customer in the UK going to France, a neighboring country with someone from Ghana going to Nigeria.  You can see the tremendous differences and we can explore those differences in the discussion, if you like.

So just two examples there of where I think OECD countries, the results we're getting are extremely uncompetitive with the rest of the world.  If I can now go to the Council recommendations,ed by in this OECD meetings we discussed these developments.

The first step was to benchmark prices all across the OECD area and to see where those prices were at, and then it to track them over a couple of years.  So we did successive reports on this, and I can generally say that a number of governments weren't happy with what they saw in that benchmarking.

We also looked at international roaming data, and although we saw more promise for more competitive outcomes in data roaming for various reasons, we still saw extremely high prices.  We started to see, first in the European area and then successively in a number of other OECD countries, people started to put in place bilateral or multilateral agreements.

Those were the European area will know of the actions taken by the European Union where they have actually regulated wholesale and retail prices, but also we see agreements across the world, some of them are just memorandum of understanding that we shod more cooperate on international roaming.

Some go further, directing operators to reduce tariffs.  Then countries between Singapore and Malaysia that do that.  And then other countries such as Australia and New Zealand who are examining what they may do in this area.

You get a lot of interesting discussion about how compatible that is with WTO and so forth, but it is clearly a trend that if the markets aren't going to react in a way we would expect, that governments will step in.

Now what we wanted to do in the Council recommendation was provide ?? and my colleague Rohan likes to use the word "menu" so I obviously haven't put in the whole recommendation on the slide because it won't fit.  There are ten points.  I tried summarizing them basically in a gradient approach.

Step 1, consumer education and telling consumers what the options are.  Step 2, make sure there is transparency about international roaming and making sure consumers have options when they can control their expenditure when going internationally.

Right up to recommendations 7?10 which, if you like, have more teeth in terms of regulatory outcome, right up to actually regulating, as in the European Union area, wholesale and retail roaming prices.  So that is basically in a nutshell what we've done in the area of international roaming.  It is a menu for governments to select what actions they would like to take if they're not happy with the prices available for their consumers, if they think they aren't competitive with other parts of the world, and if they think this is affecting trade and travel, and basically to help their economies to develop going forward.

So I will hand it back to you Taylor, and I know Rohan would like to comment.  Then I guess we open it up to anyone else who would like to comment.

>> ROHAN SAMARAJIVA:  Thank you.  In the spirit of keeping the focus, I suppose we will have to first ask why we are talking about roaming at the IGF?  Because when people think of roaming, they think of voice calls, which is old?style telephoning.

But I think it is correct to talk about roaming at the IGF because today increasingly with the pro live rakes of smartphones, people are using their smartphones wherever they go, and it is actually quite illogical to sort of have to switch off data roaming in strange cities because that is exactly when you want the various conveniences your map programs and various other things give you.

   So it seems insane, in my opinion for operators to not accommodate the need for the functionality of our phones, but insanity is not limited to telephone operators. 

I have never understood why hotels have set telephone charges for people staying in their rooms at extraordinarily high amounts all these years, when we have been bypassing them in various ways using mobiles, payphone, whatever, and they could have gotten our money if they were actually pricing in a reasonable manner. 

But basically we have been interested in roaming, and we have done quite a bit of work, looking at roaming prices particularly in South Asia.  I investigated why these roaming prices are very high and why the market doesn't work.  It is basically a bilateral monopoly where each company agrees to rip off the customers of the other country.

Basically Company A goes to Company B in another company and says, how much money to you want?  That company says we want an unreasonable amount, and you say yes.

In return Company B asks the other company how much you want, and they also say yes.  So they mutually exploit each other's customers, and the various companies and organizations that pay roaming bills subsidize this extortion.

And then the rest of us basically do suboptimizations, like carrying SIMS from other countries and so on.  For example, that is in the OECD menu, and in my opinion it is not something that should be included because even for voice, it gave a suboptimal solution in that you could make calls, but not receive calls from people calling you.

For example when I am in India, I find myself walking with two phones because I want to be reached, but also I want to reach.

With one phone I do this, and on the other phone I do that.  I get very confused, and that is really not an optimal solution.  You can imagine how suboptimal it is when you are doing data; that is really not a solution.

So when I look at the situation with regard to roaming, I see almost two extremes, something that Sam mentioned, which is now what is offered by the company called Airtell in Africa, an innovation put together by a company called Zane that later got taken over.

What they do, irrespective of anybody else, they simply allow ?? they have licenses in multiple countries, and they simply allow their customers to be treated like national customers in other countries.

That is why the numbers Sam showed were so low.  When the Ghana customer is in Nigeria they are being treated like a Nigerian customer, and they can, for example, load their phones.

Because remember, my people are mostly running on prepay.  On a think?tank, we focus on the bottom of the pyramid.  And on prepaid cards, you can even load up your card in Nigeria when you are roaming, buying value and putting it in your card, and it will still recognize.

There are some issues here.  Actually this was originally designed to keep hold of their customers, in a way, in opposition to the effort on the part of the competitors in Kenya.  So it is not a fully comprehensive solution.  And strangely, I suppose, the company that is doing this stuff in Africa, it doesn't do this in its home territory in South Asia in a uniform way.

  Now the other extreme for those who like government interpretation, Singapore/Malaysia where the two countries have agreed that in the interest of greater integration and so on ?? and remember the logic has to come from the larger regionalization imperatives.  They have decided to mutually bring down the retail prices that are charged.  I suppose that can be done by various country pairs.  

   The third option I favor, an old American technique called jaw?boning, and I have no idea why it is called jaw?boning, but I remember it because I used to teach American policy to Americans at one point in my life, and I kind of like the quaint term; it sticks in your mind, even though you have no idea what it is

Jaw?boning means that policymakers and regulators just talk about something endlessly.  They talk about something, you know, sort of like Luigi and Bardella talking at an endless pace, talking about this endlessly.

And some action will result somewhere in the system; somebody's default will shift from wherever it was.  Here is what I am generally recommending, we as think?tanks and policy advocates and governments, et cetera, talk about roaming.

And as you harass these people and engage them in debate and publicly shame them ?? which I do frequently to phone companies in my region.  I am actually beginning to see them moving toward something a little more reasonable than their present unreasonable behavior. 

And they are beginning to see ?? for example, my own company has given me a bunch of countries where they give me sort of one country, one price for my data.  I just sign on to their package, and for X megabytes they will charge me a reasonable amount in different countries, in fact addressing some of the transparency issues that are quite problematic.

Because to understand roaming, you need an app.  Honestly, you don't need a table, you don't need graphics; you need an application to do computing and advising because it is no nontransparent and opaque.  So I think in the spirit of good old jaw?boning, we should jaw?bone about this some more.  Thank you.

>> TAYLOR REYNOLDS:  Thank you very much, Rohan.  On the teleprompter, it was saying like owning a job, but it is jaw?boning.  Very good, now it looks like it was corrected, and I don't know where it comes from, myself as an American.

I would like to get you out before 12:30.  Since you sacrificed coming here, we will get you to the lunch line early.  Are there any comments or questions from the audience first?  Then we will have a quick roundup from the panelists.

If I can just say one thing, the first thing we did when we arrived here, we knew that data roaming would be so expensive that we stopped in the airport and we spent about 40 minutes or so getting local SIM cards to put in our phones.  Luckily, we were able to do that here in Azerbaijan, but otherwise, this area really needs to be addressed.

It doesn't look like we have any comments on this ?? go ahead.

>> NIGEL HICKSON:  I found your presentation most interesting.  What I'm saying isn't really having anything to do with ICANN, but that has never stopped me before.

   Since 2006 I was involved in negotiating the European roaming regulations.  Now three regulations have come out of the European Union, so I think much of this was a fairly radical move by the European Union to create a roaming regulation.  Perhaps the second and third wasn't radical, but the first was, the fact we would intervene in terms of roaming prices or roaming services.

What came out of the exercise was to show how difficult the process is, and I mean not just difficult, if you like, from a political point of view because I think there was goodwill on all sides, including that of the operators to reach an equitable solution, but just the actual difficulty in the way the market works.

And I am sure ?? I haven't been involved in these particular discussions, but I'm sure than when OECD was formulating these recommendations, they recognized that the economics of this are not simple, and of course, the agreements that the operators have vary enormously.  Some operators have agreements with an awful lot of operators, and some operators conform alliances.

They have the market power and the size to form like the vodo (phonetic) phones and alliances in many countries.  Having lower roaming prices is somewhat easier, but I'm not saying it is trivial.  So I think it is difficult, but I think the point here is obvious the transparency and the prices they face when visiting other countries.

I think that is fundamental for data and voice.  People need to be able to have the choice.  I think, as people do have the choice, and as we found here in terms of the wi?fi, increasingly the operators will ?? well, wi?fi is good when it works.

But operators will recognize here, as they have in the European Union, they have to lower prices to stop people from turning off 3G and going to wi?fi.

And on the slide with China, presumably the slide indicates the fact that people from China dialing out from the UK back to China are getting cheap rates from UK operators, where the inconvenience is not true coming out of China.  Thank you.

>> SAM PALTRIDGE:  When I speak to the Chinese government, they tell me the cheap east operators successfully negotiated low wholesale rates and 20 OECD countries and other countries such as Singapore where China Mobile successfully negotiated low wholesale rates.

There is conceivably a way they may do it by balancing traffic in the opposite direction, but generally you do not charge lower retail rates than wholesale rates.  So logically you would infer from that, they have negotiated lower wholesale rates.  The question then is why hasn't the market reacted in the opposite direction for the UK operators to lower the tariffs? 

I don't want to necessarily make this is UK example because I can point the finger at any OECD country and I would get the same result, that consumers going in the opposite direction are in fact paying high rates.   There is an American word I hate to introduce, but whip?soaring.  Effectively we haven't seen whip?soaring much ?? 

>> TAYLOR REYNOLDS:  Different part of America.

>> SAM PALTRIDGE:  Perhaps Tad with an American accent can pronounce it.  But we haven't seen it where the first countries that introduced competition realized that if you had three operators in a country and you were negotiating with one operator in a country, that that one operator could play off the three operators while still offering a single rate in the opposite direction.

And if you have some types of government intervention which we are now seeing in Ghana and Congo, in Pakistan where the government is coming in and saying you must pay this termination charge.

And if they extend that to international roaming, and they may not do it openly, but behind closed doors, you may get a situation of whip?soaring which Rohan may want to comment on.

>> TAYLOR REYNOLDS:  We have four minutes left.

>> ROHAN SAMARAJIVA:  I am intrigued by the Chinese example.  I don't have to be diplomatic; that is what I do.  The nondiplomatic explanation is "A" UK operators are stupid and they didn't negotiate lower wholesale termination rate from the Chinese; that is one possibility.

Or B, they are extremely clever and they negotiated a lower wholesale rate, and they are keeping the retail high and keeping the difference.  So they keep it at comparable levels and keep huge profits from people roaming in China.  Those are the two possibilities.

But I think this sort of reflects, in a way, the beauty ?? and I am trying to wrap up whatever comments you want me to make.  These kinds of issues I think reflect the unique strengths and weaknesses of IGF where in one sense almost everything can be brought into this discussion, including mobile, voice and so on, which shouldn't really be part of IGF discussions.

But that is the way the Internet is going; it is becoming very broad.  In my opinion it is better to talk about these things in these kinds of settings where no treaty obligations are concluded, and we get rid of things like WCIT.

In my opinion, the best thing to do with the WCIT conference is to cancel it.  Thank you.

>> TAYLOR REYNOLDS:  Thank you very much.  Valerie, any final comments?

>> VALERIE BETANCOURT:  I was a bit tempted to kind of make this comment, since we are at IGF and talking about things related to the Internet. 

This discussion on international mobile roaming services, I was just wondering that a consideration could be in the age of IP traffic and the Internet, whether a discussion on prices and substitutability of other voice?type Internet and able applications like Skype, there are a lot of voice?enable Internet applications.

How do they feature in these discussions, and the consumer choices that are put in the table for consumers to decide, irrespective of the pricing and availability and the use of these other substitute services.

>> TAYLOR REYNOLDS:  Quickly to say, I think that is helping drive down prices overall for roaming, the work?arounds.

Nigel, final comments?  Okay.  With that, I would like to thank our participants for coming to the meeting.  And I would like to thank everyone here for breaking away from the session.  I thought it was a good discussion. 

Now I hope you can rush and get something to eat in the next few minutes.  Thank you very much.  Goodbye.

 

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This is being provided in a rough?draft format. Communication Access Realtime Translation (CART) is provided in Order to facilitate communication accessibility and may not be a totally verbatim record of the proceedings.

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